Analyst Richard Whittington also cut the price target for the chipmaker to $26 from $30. Whittington wrote that Intel's server chip business is losing ground to cloud solutions which have "visibly slowed high margin data center CPUs." He also noted that Intel may be in danger of losing its foundry customer Altera (ALTR).
"The strategic problem facing the company," Whittington writes, "seems to be enticing Apple (AAPL) to use Intel's foundry mechanism at acceptably high margins."
The downgrade comes a week after Intel's quarterly earnings report when the company announced earnings of 51 cents a share on $13.8 billion in revenue. The report missed Thomson Reuters estimates of 52 cents a share earnings on $13.71 billion in revenue.
TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTEL CORP (INTC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."